4 Reasons Why You Should Focus on Customer Service to Drive Profitability
Your business exists for two main purposes: to fill a customer need and to be profitable. As it turns out, these two goals can be attained collectively by investing into customer experience. Research confirms, time and time again, that organizations that have better customer service are profitable. A study conducted by Temkin Group found a moderate increase in customer experience warranted an average revenue increase of $823 million over 3 years for a company with an average $1 billion annual revenue.
Here are 4 Instances Where Customer Service and Profitability Correlate:
A 5% increase in customer retention can boost profitability anywhere from 25%-95%. Quality customer service breeds customer loyalty. When property managers can keep owners and tenants more than content with their customer experience, property management teams can drive customer retention. As customer retention rates rise, property management sales and acquisition teams are able to reduce the resources and time spent on acquiring new customers or tenants to fill vacancies, resulting in higher profits.
According to Gartner, 64% of people find experience more relevant to spending decisions than actual price. With every experience that exceeds expectations, customers are willing to pay more because they believe that the value of the service they’re being given is worth to a higher rate. Research confirms that 86% of customers are happy to dish out a larger sum of cash for a better customer experience. So, as property management companies look to increase profitability, they can rationalize higher fees by delivering an exceptional level of customer care. With the right software, property management companies can easily deliver improved and more attentive service without hiring additional staff or overextending resources, essentially with minimal costs allowing for a true increase in profitability.
Recommendations and Referrals
As vacancies occur, property management companies will typically rely on advertisements and unit listings to fill vacancies as quickly as possible. The longer a unit sits vacant, the more time owners and property managers are operating with reduced profitability and cashflow. By devoting energy into great customer service, your existing customers will be more likely to make recommendations to friends, family, or colleagues about your service. They may also be willing to contribute to company sanctioned testimonials which can reduce the marketing dollars spent on attracting new tenants. Research conducted by the Temkin Group confirms, 77% of people would recommend a company to a friend after a positive experience, but 13% of customers who’ve had a bad experience will share with at least 15 others.
Long Term Contracts
If customers are at the point of re-signing, they are happy with your service and choosing to move forward. Happy owners and tenants are more likely to sign contracts that retain services for an extended period of time, securing long-term profitability for property management companies. Long-term contracts keep customers onboard for more time, avoiding a large volume of tenant turnover. This increases profitability by eliminating the frequency of sourcing prospective new customers. Instead of filling vacancies, your property management team can use the saved time and resources to invest in to growing their management portfolio to further reduce costs and open more channels for revenue.